2017 (4) TMI 682 - AT - Central Excise

Penalty - case of appellant is that since the main noticee M/s Siimalin Chemicals Industries Pvt Ltd was granted immunity by the Settlement Commission by an Order u/s 32M of CEA, 1944, penalty cannot be imposed on the other co-noticees as well whether they had approached the Settlement Commission for immunity or other wise - Held that - there is no reason to deviate from the said decision of the Tribunal in Motilal Gupta s case 2016 (5) TMI 608 - CESTAT MUMBAI , where it was held that if the liability of the co-noticees arise from different act they will not get immunity from further proceeding - automatic immunity cannot be granted to the appellants who were not before the Settlement Commission - appeal dismissed - decided against appellant.

Summary

Issues:
1. Whether penalty imposed on co-noticees is sustainable when immunity is granted to the main noticee by the Settlement Commission.

Analysis:
The case involved appeals against an order passed by the Commissioner, Central Excise, Customs-Vadodara-I, regarding alleged clandestine removal of goods by M/s Simalin Chemical Industries Pvt Ltd. The main issue was whether penalty imposed on co-noticees was sustainable when immunity was granted to the main noticee and other co-noticees by the Settlement Commission under Section 32M of CEA, 1944. The appellant contended that immunity granted to the main noticee should also apply to co-noticees, citing the decision in S K Colombowala vs CC. On the other hand, the Revenue argued based on judgments of the Hon'ble Bombay High Court and a recent Tribunal decision in Motilal Gupta vs CCE, Thane.

The Tribunal examined whether the penalty imposed on the co-noticees was sustainable given the immunity granted to the main noticee and other co-noticees by the Settlement Commission. The appellant argued for extending the same immunity to them based on the S K Colombowala case, while the Revenue relied on judgments of the Hon'ble Bombay High Court and the Tribunal's decision in Motilal Gupta case. The Tribunal noted that the S K Colombowala case did not consider the judgments of the Hon'ble High Court and held that the principles laid down by the Bombay High Court, approved by the Supreme Court, were binding. Therefore, the Tribunal upheld the impugned order, dismissing the appeals as lacking merit.

In conclusion, the Tribunal held that the penalty imposed on the co-noticees was sustainable even though immunity was granted to the main noticee and other co-noticees by the Settlement Commission. The decision was based on the binding principles laid down by the Hon'ble Bombay High Court and upheld by the Supreme Court, as referenced in the Tribunal's decision in Motilal Gupta case. The appeals were dismissed accordingly.